The accompanying
consolidated financial statements, except for the February 28, 2004
consolidated balance sheet, have been prepared without audit. In the opinion of management, the
accompanying consolidated financial statements contain all adjustments
(consisting of only normal recurring accruals) necessary to present fairly the
financial position of Bed Bath & Beyond Inc. and subsidiaries (the Company)
as of November 27, 2004 and February 28, 2004 and the results of its operations
for the three months and nine months ended November 27, 2004 and November 29,
2003, respectively, and its cash flows for the nine months ended November 27,
2004 and November 29, 2003, respectively. All significant intercompany balances
and transactions have been eliminated in consolidation.

The accompanying unaudited consolidated financial statements are
presented in accordance with the requirements for Form 10-Q and consequently do
not include all the disclosures normally required by accounting principles generally
accepted in the United States of America.
Reference should be made to Bed Bath & Beyond Inc.s Annual Report
on Form 10-K for the fiscal year ended February 28, 2004 for additional
disclosures, including a summary of the Companys significant accounting
policies.

The Company
exhibits less seasonality than many other retail businesses, although sales
levels are generally higher in August, November and December and generally
lower in February and March.

Operating results
of the Company on a quarterly basis may not be indicative of operating results
for the full year.

Certain reclassifications have been made to the fiscal 2003
consolidated financial statements to conform to the fiscal 2004 consolidated
financial statement presentation.

In November 2003, the Financial Accounting Standards Board (FASB)
ratified the Emerging Issues Task Forces (EITF) consensus on Issue 03-10,
which amends EITF 02-16. This consensus
requires that if certain criteria are met, consideration received by a reseller
in the form of reimbursement from a vendor for honoring the vendors sales
incentives offered to consumers, such as manufacturers coupons and rebates
offered to consumers, should not be recorded as a reduction of the cost of the
resellers purchases from the vendor.
The Company adopted EITF 03-10 at the beginning of fiscal 2004. The adoption of EITF 03-10 did not have a
material impact on the Companys consolidated financial statements.

In December 2003, the FASB issued FASB Interpretation (FIN) 46R, Consolidation
of Variable Interest Entities. FIN 46R
replaces FIN 46 and addresses consolidation by business enterprises of variable
interest entities. The provisions of FIN 46R are effective for the first reporting
period that

6

ends after December 15, 2003 for variable interests in those entities
commonly referred to as special purpose entities. Application of the provisions of FIN 46R for
all other entities is effective for the first reporting period ending after
March 15, 2004. The adoption of FIN 46R did
not have a material impact on the Companys consolidated financial statements.

As permitted under Statement of Financial Accounting Standard (SFAS)
No. 148, Accounting for Stock-Based Compensation  Transition and Disclosure,
the Company elected not to adopt the fair value based method of accounting for
its stock-based compensation plans, but continues to apply the provisions of
Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to
Employees (APB No. 25). The Company
has complied with the disclosure requirements of SFAS No. 148.

Accordingly, no compensation cost has been recognized in connection with
the stock option plans. Set forth below
are the Companys net earnings and net earnings per share as reported, and as
if compensation cost had been recognized (pro forma) in accordance with the
fair value provisions of SFAS No. 148:

On December 16, 2004, the FASB issued SFAS No. 123 (revised 2004), Share-Based
Payment (SFAS No. 123(R)). SFAS No.
123(R) will require companies to measure all employee stock-based compensation
awards using a fair value method and record such expense in its consolidated
financial statements. In addition, the
adoption of SFAS No. 123(R) requires additional accounting and disclosure related
to the income tax and cash flow effects resulting from share-based payment
arrangements. SFAS No. 123(R) is
effective beginning as of the first interim or annual reporting period
beginning after June 15, 2005. The
Company is in the process of determining the impact of

7

the requirements of SFAS No. 123(R) which could have a material impact
on its consolidated financial statements.

Investment securities at November 27, 2004 consist primarily of U.S.
Government Agency debt securities and municipal debt securities. Because the
Company has the ability and intent to hold the securities until maturity, it
classifies its securities as held-to-maturity. These investment securities are
recorded at amortized cost. Premiums are
amortized and discounts are accreted over the life of the related
held-to-maturity securities as adjustments to interest income using the
effective interest method. Dividend and interest income are recognized when
earned.

The Company presents earnings per share on a basic and diluted
basis. Basic earnings per share has been
computed by dividing net earnings by the weighted average number of shares
outstanding. Diluted earnings per share
has been computed by dividing net earnings by the weighted average number of
shares outstanding including the dilutive effect of stock options.

Options for which the exercise price was greater than the average
market price of common shares for the three months and nine months ended November
27, 2004 and November 29, 2003 were not included in the computation of diluted
earnings per share as the effect would be anti-dilutive. These consisted of
options totaling 1,998,900 and 103,900 shares for the three months and 2,955,900
and 669,027 shares for the nine months ended November 27, 2004 and November 29,
2003, respectively.

The Company maintains two uncommitted lines of credit of $100 million
and $50 million, which expire in September 2005 and February 2005,
respectively. These uncommitted lines of
credit are currently, and are expected to be, used for letters of credit in the
ordinary course of business. As of November
27, 2004, the Company did not have any direct borrowings under the uncommitted
lines of credit.

On June 19, 2003, the Company acquired Christmas Tree Shops, Inc. (CTS).
The results of CTS operations have been included in the consolidated financial
statements since the date of acquisition. At the date of acquisition, CTS,
headquartered in South Yarmouth, Massachusetts, operated 23 stores in 6
states. CTS is a retailer of giftware
and household items selling a broad assortment of domestics merchandise and
home furnishings at low prices in many categories including home décor,
giftware, housewares, food, paper goods, and seasonal products.

8

The aggregate all cash purchase price, including the costs of the
acquisition, was $194.4 million, net of cash acquired, which included $175.5
million of cash and $18.9 million in deferred payments payable in cash over
three years. In June 2004, the Company paid
the first of these deferred payments of $6.7 million.

The acquisition has been accounted for under the purchase method of
accounting in accordance with SFAS No. 141, Business Combinations.
Accordingly, the total purchase price has been allocated to the assets acquired
and liabilities assumed based on their estimated fair values at June 19, 2003,
including a debt prepayment penalty, with the excess of the purchase price over
the net assets acquired of approximately $132.0 million being allocated to goodwill.

The pro forma financial information presented below for 2003 is
unaudited and is based on the Companys historical results, adjusted for the
impact of certain acquisition related items, such as: the reduction of net
interest income due to the purchase price paid and the prepayment of CTS debt,
the net reduction of certain selling, general and administrative expenses
directly attributable to the transaction, and the related pro forma income tax
effects, as if they occurred as of the beginning of the respective period.

Three Months Ended

Nine Months Ended

November 27,

November 29,

November 27,

November 29,

(in
thousands, except per share data)

2004

2003

2004

2003

(unaudited)

(unaudited)

(unaudited)

(pro forma)

Net sales

$

1,305,155

$

1,174,740

$

3,680,032

$

3,284,381

Net earnings

121,927

100,506

323,984

258,231

Earnings per
share:

Basic

$

0.40

$

0.34

$

1.08

$

0.87

Diluted

$

0.40

$

0.33

$

1.06

$

0.85

The unaudited pro forma results of the Company have been prepared for
comparative purposes only and in managements opinion do not purport to be
indicative of the Companys results of operations that would have occurred had
the CTS acquisition been consummated at the beginning of the period. Pro forma
results are not intended to be a projection of future results.

On December 15, 2004, the Company announced that the Board of Directors
approved a $350 million share repurchase program, authorizing the repurchase of
shares of its common stock. The Company
is authorized to make repurchases from time to time in the open market pursuant
to existing rules and regulations and other parameters approved by the Board. The program was effective on December 15,
2004, and is expected, depending on prevailing market conditions, to be
completed within approximately twelve months.

9

ITEM
2. MANAGEMENTS DISCUSSION
AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Bed Bath & Beyond Inc. and subsidiaries (the Company) operate
specialty retail stores nationwide. The
Companys objective is to be a customers first choice for products and
services in the categories offered, in the markets in which the Company operates.

The Companys strategy is to achieve this objective through excellent
customer service, an extensive breadth and depth of assortment, everyday low
prices, introduction of new merchandising offerings and development of our
infrastructure.

Operating in the highly competitive retail industry, the Company, along
with other retail companies, is influenced by a number of factors including,
but not limited to, general economic conditions, consumer preferences and
spending habits, competition from existing and potential competitors, unusual
weather patterns and the ability to find suitable locations at reasonable occupancy
costs to support the Companys expansion program.

For the three and nine months ended November 27, 2004, the Companys
consolidated net sales increased by 11.1% and 15.7%, respectively, as compared
to the corresponding periods last year.
The three month net sales increase was primarily attributable to the
continuing Bed Bath & Beyond (BBB) store expansion program and an
increase in comparable store sales. The
nine month net sales increase was primarily attributable to the continuing BBB
store expansion program, the inclusion of the results of Christmas Tree Shops,
Inc. (CTS) since its acquisition in June 2003 and an increase in comparable
store sales.

Comparable store sales for the fiscal three and nine months of 2004
increased by approximately 3.1% and 4.2%, respectively. As of the beginning of
the fiscal third quarter of 2004, CTS was included in the calculation of
comparable store sales. The increase in
comparable store sales reflected a number of factors, including, but not
limited to, the continued consumer acceptance of the Companys merchandise
offerings and a strong focus on customer service with an emphasis on responding
to customer feedback.

A store is considered a comparable store when it has been open for
twelve full months following its grand opening period (typically four to six
weeks). Stores relocated or expanded are
excluded from comparable store sales if the change in square footage would
cause meaningful disparity in sales over the prior period. In the case of a store to be closed, such
stores sales are not considered comparable once the store closing process has
commenced.

For the three and nine months ended November 27, 2004, the Companys
consolidated net earnings increased by 21.3% and 26.9%, respectively, as
compared to the corresponding periods last year. These increases were primarily a result of
relative increases in gross profit as a percentage of net sales and relative
decreases in selling, general and administrative expenses (SG&A) as a
percentage of net sales.

Net sales for the three
months ended November 27, 2004 were approximately $1.305 billion, an increase
of $130.4 million or approximately 11.1% over net sales of approximately $1.175
billion for the corresponding quarter last year. For the nine months ended November 27, 2004,
net sales were approximately $3.680 billion, an increase of $500.0 million or
approximately 15.7% over net sales of approximately $3.180 billion for the
corresponding nine months of last year.

Approximately
59.0% of the increase in net sales for the nine months ended November 27, 2004
was attributable to an increase in the Companys new store sales, approximately
20.7% of the increase was attributable to CTS sales (acquired on June 19,
2003) and the balance of the increase was primarily attributable to the
increase in comparable store sales. Approximately
73.1% of the increase in net sales for the three months ended November 27, 2004
was attributable to an increase in the Companys new store sales with the balance
of the increase primarily attributable to the increase in comparable store
sales. The increase in comparable store
sales for the fiscal three and nine months of 2004 was 3.1% and 4.2%,
respectively. The increases in comparable store sales are due to a number of
factors, including but not limited to, the continued consumer acceptance of the
Companys merchandise offerings and a strong focus on customer service with an
emphasis on responding to customer feedback.

Sales of domestics
merchandise and home furnishings for the Company accounted for approximately 49%
and 51% of net sales, respectively, for both the three and nine months ended November
27, 2004. The sales of domestics
merchandise and home furnishings accounted for approximately 48% and 52% of net
sales, respectively, for the three months ended November 29, 2003 and approximately
49% and 51% of net sales, respectively, for the nine months ended November 29,
2003.

Gross profit for the three and nine months ended November 27, 2004 was
$548.2 million and $1.536 billion, or 42.0% and 41.7% of net sales,
respectively. Gross profit for the three
and nine months ended November 29, 2003 was $487.0 million and $1.313 billion,
or 41.5% and 41.3% of net sales, respectively.
The increase in gross profit as a percentage of net sales for the three
and nine months ended November 27, 2004 was driven primarily by the reduction
of inventory acquisition costs which resulted in part from favorable shifts in
the sales mix attributable to the Companys current merchandise offerings, as
well as the Companys procurement initiatives to improve gross profit.

SG&A for the three and nine months ended November 27, 2004 was $357.2
million and $1.027 billion, or 27.4% and 27.9% of net sales, respectively. SG&A for the three and nine months ended November
29, 2003 was $325.5 million and $905.5 million, or 27.7% and 28.5% of net sales,
respectively. The decrease in SG&A
as a percentage of net sales for the quarter was primarily attributable to a
decrease in payroll and payroll related items and occupancy costs, which
primarily resulted from the comparable store sales increase. Also contributing to
the decrease in SG&A as a

11

percentage of net sales were store opening costs, which primarily
resulted from a decrease in the number of store openings for the fiscal third
quarter as compared to the corresponding quarter a year ago. The above relative percentage decreases were
partially offset by an increase in advertising expense.

The decreasein SG&A as a percentage of net sales for the fiscal nine
months was primarily attributable to a decrease in payroll and payroll related
items, occupancy costs and other store expenses, which primarily resulted from
the comparable store sales increase. The
above decreases were partially offset by an increase in advertising expense.

Operating profit for
the three months ended November 27, 2004 increased to $191.0 million compared
to $161.5million during the comparable period in
2003. For the nine months ended November
27, 2004 operating profit increased to $508.8 million compared to $407.8million during the comparable period of 2003. The improvements in operating profit were a
result of the increases in net sales and relative increases in gross profit as a
percentage of net sales and relative decreases in SG&A as a percentage of
net sales, as discussed above.

Interest income
was $4.9 million and $11.7 million for the fiscal three and nine month periods
of 2004, respectively, compared to $2.0 million and $7.2 million for the fiscal
three and nine month periods of 2003, respectively. Interest income increaseddue
to an increase in invested cashand an
increase in the Companys average investment interest rate as a result of the recent
upward trend in short term interest rates during the past several months.

The effective tax
rate was 37.75% for the fiscal three and nine month periods of 2004 and 38.50%
for the fiscal three and nine month periods of 2003. The decrease is due to a reduction in the
weighted average effective tax rate resulting from a change in the mix of the
business within the taxable jurisdictions in which the Company operates.

As a result of the
factors described above, net earnings increased to $121.9 million for the
fiscal three month period of 2004 and $324.0 million for the fiscal nine month
period of 2004, compared with $100.5 million for the fiscal three month period
of 2003 and $255.2 million for the fiscal nine month period of 2003.

The Company is
engaged in an ongoing expansion program involving the opening of new stores in
both new and existing markets and the expansion or relocation of existing stores.
As a result of this program, the Company operated 640 BBB stores, 26 CTS stores
and 32 Harmon stores at the end of the fiscal third quarter of 2004, compared
with 569 BBB stores, 24 CTS stores and 30 Harmon stores

12

at the end of the
corresponding quarter last year. At November
27, 2004, Company-wide total square footage was approximately 22.4 million
square feet.

The Company opened
34 BBB stores during the third quarter of fiscal 2004 which brought the total BBB
stores opened to 65 for the nine months of fiscal 2004. The Company plans to open approximately 20 additional
BBB stores, in both new and existing markets, and approximately four additional
Harmon stores by the end of the fiscal year.

On December 15,
2004, the Company announced that the Board of Directors approved a $350 million
share repurchase program, authorizing the repurchase of shares of its common
stock. The Company is authorized to make
repurchases from time to time in the open market pursuant to existing rules and
regulations and other parameters approved by the Board. The program was effective on December 15,
2004, and is expected, depending on prevailing market conditions, to be
completed within approximately twelve months.

Net cash provided
by operating activities for the nine months ended November 27, 2004 was $315.3
million as compared with $300.9 million in the corresponding period of fiscal 2003. The increase in net cash provided by
operating activities was primarily attributable to an increase in net income partially
offset by an increase in merchandise inventories (primarily a result of new
store space), the timing of liability payments and the reduction of the tax benefit
received from the exercise of stock options.

Inventory per
square foot was $54.29 as of November 27, 2004 and $57.49 as of November 29,
2003. The Company continues to focus on
optimizing inventory productivity while maintaining appropriate in-store
merchandise levels to support sales growth.

Net cash used in
investing activities for the nine months ended November 27, 2004 was $379.2
million as compared with $224.1 million used in the corresponding period of fiscal
2003. This change is primarily the
result of a net increase in investment securities in the current year and the
payment for the acquisition of CTS in the prior year. The increase in capital
expenditures was primarily attributable to expenditures for furniture, fixtures
and leasehold improvements for the 65 new BBB stores opened during the first nine
months of fiscal 2004 and information technology enhancements, compared to
expenditures for leasehold improvements, furniture, fixtures and information
technology for the 79 new BBB stores opened in the corresponding period last
year.

Net cash provided
by financing activities for the nine months ended November 27, 2004 was $20.8
million as compared with $27.9 million in the corresponding period of 2003. The decrease in net cash provided by financing
activities is primarily attributable to a decrease in proceeds from the
exercise of stock options in the current year offset by the prepayment of CTS
debt in the prior year in conjunction with the acquisition.

For fiscal 2004,
the Company believes that its current operating cash flow, working capital, and
cash and cash equivalents on hand should be sufficient to meet its obligations
in the ordinary course of

On December 16, 2004, the FASB issued SFAS No. 123 (revised 2004), Share-Based
Payment (SFAS No. 123(R)). SFAS No.
123(R) will require companies to measure all employee stock-based compensation
awards using a fair value method and record such expense in its consolidated
financial statements. In addition, the
adoption of SFAS No. 123(R) requires additional accounting and disclosure related
to the income tax and cash flow effects resulting from share-based payment
arrangements. SFAS No. 123(R) is
effective beginning as of the first interim or annual reporting period
beginning after June 15, 2005. The
Company is in the process of determining the impact of the requirements of SFAS
No. 123(R) which could have a material impact on its consolidated financial
statements.

The preparation of
consolidated financial statements in conformity with accounting principles generally
accepted in the United States of America requires the Company to establish
accounting policies and to make estimates and judgments that affect the
reported amounts of assets and liabilities and disclosure of contingent assets
and liabilities as of the date of the consolidated financial statements and the
reported amounts of revenues and expenses during the reporting period. The
Company bases its estimates on historical experience and on other assumptions
that it believes to be relevant under the circumstances, the results of which
form the basis for making judgments about the carrying value of assets and
liabilities that are not readily apparent from other sources. In particular,
judgment is used in areas such as the provision for sales returns, inventory
valuation, impairment of long-lived assets, goodwill and other indefinitely
lived intangible assets, and accruals for self insurance, litigation and store
opening, expansion, relocation and closing costs. Actual results could differ
from these estimates.

Sales
Returns: Sales
returns, which are reserved for based on historical experience, are provided
for in the period that the related sales are recorded. Although these estimates
have not varied materially from historical provisions, actual experience could
vary from our historical experience in the future if the level of sales return
activity changes materially. In the
future, if the Company concludes that an adjustment to the sales returns
accrual is required, the reserve will be adjusted accordingly.

Inventory
Valuation: Merchandise
inventories are stated at the lower of cost or market. BBBs and Harmons inventory cost is
calculated using the retail inventory method and CTS inventory cost is
calculated using the first-in, first-out cost method. Under the retail inventory method, the
valuation of inventories at cost and the resulting gross margins are calculated
by applying a cost-to-retail ratio to the retail value of inventories.

14

At any one time,
inventories include items that have been written down to the Companys best
estimate of their realizable value.
Factors considered in estimating realizable value include the age of
merchandise and anticipated demand.
Actual realizable value could differ materially from this estimate based
upon future customer demand or economic conditions.

The Company
estimates its reserve for shrinkage throughout the year, based on historical
shrinkage. Actual shrinkage is recorded
at year-end based upon the results of the Companys physical inventory
count. Historically, the Companys
shrinkage has not been volatile.

Impairment
of Long-Lived Assets:
The Company reviews long-lived assets for impairment by comparing the
carrying value of these assets with their estimated future undiscounted cash
flows when events or changes in circumstances indicate the carrying value of
these assets may exceed their current fair values. If it is determined that an impairment loss
has occurred, the loss would be recognized during that period. The impairment loss is calculated as the
difference between asset carrying values and the present value of the estimated
net cash flows. The Company has not
historically had a material impairment of long-lived assets and the Company
does not believe that a material impairment currently exists. In the future, if events or market conditions
affect the estimated cash flows generated by the Companys long-lived assets to
the extent that an asset is impaired, the Company will adjust the carrying
value of these assets in the period in which the impairment occurs.

Goodwill
and Other Indefinitely Lived Intangible Assets: The Company reviews goodwill and other
intangibles that have indefinite lives for impairment annually and otherwise
when events or changes in circumstances indicate the carrying value of these
assets might exceed their current fair values.
Impairment testing is based upon the best information available
including estimates of fair value which incorporate assumptions marketplace
participants would use in making their estimates of fair value. The Company has not historically recorded an impairment
to its goodwill and other indefinitely lived intangible assets and the Company does
not believe that a material impairment currently exists. In the future, if events or market conditions
affect the estimated fair value to the extent that an asset is impaired, the
Company will adjust the carrying value of these assets in the period in which
the impairment occurs.

Self
Insurance: The Company
utilizes a combination of insurance and self insurance for a number of risks
including workers compensation, general liability, automobile liability and
employee related health care benefits (a portion of which is paid by our
employees). Liabilities associated with the risks that we retain are estimated
by considering historical claims experience, demographic factors, severity
factors and other actuarial assumptions.
Although the Companys claims experience has not displayed substantial
volatility in the past, actual experience could materially vary from our
historical experience in the future.
Factors that affect these estimates include but are not limited to:
inflation, the number and severity of claims and regulatory changes. In the future, if the Company concludes an
adjustment to self insurance accruals are required, the liability will be
adjusted accordingly.

Litigation: The Company records an estimated liability
related to various claims and legal actions arising in the ordinary course of
business which is based on available information and advice from outside
counsel, where appropriate. As additional
information becomes available, the Company reassesses the potential liability
related to its pending litigation and revises its estimates as appropriate. The
Company cannot predict the nature and validity of claims which could be
asserted

15

in the future, and
future claims could have a material impact on its earnings.

Store
Opening, Expansion, Relocation and Closing Costs: Store opening, expansion, relocation and
closing costs, including estimates for markdowns, asset residual values and
projected occupancy costs, are charged to earnings as incurred. Prior to the adoption of SFAS No. 146, Accounting
for Costs Associated with Exit or Disposal Activities, which was effective for
any exit or disposal activity initiated after December 31, 2002, costs related
to store relocations and closings were provided for in the period in which
management approved the relocation or closing of a store. Actual costs related
to store relocations and closings could differ from these estimates.

On June 19, 2003,
the Company acquired CTS. The results of
CTS operations have been included in the consolidated financial statements
since the date of acquisition. At the date of acquisition, CTS, headquartered
in South Yarmouth, Massachusetts, operated 23 stores in 6 states. CTS is a retailer of giftware and household
items selling a broad assortment of domestics merchandise and home furnishings
at low prices in many categories including home décor, giftware, housewares,
food, paper goods, and seasonal products.

The aggregate all
cash purchase price, including the costs of the acquisition, was $194.4
million, net of cash acquired, which included $175.5 million of cash and $18.9
million in deferred payments payable in cash over three years. In June 2004, the Company paid the first of
these deferred payments of $6.7 million.

This Form 10-Q may contain forward looking statements. Many of these forward looking statements can
be identified by use of words such as may, expect, anticipate, estimate,
assume, continue, project, plan, and similar words and phrases. The Companys actual results and future
financial condition may differ materially from those expressed in any such
forward looking statements as a result of many factors that may be outside the
Companys control. Such factors include,
without limitation: general economic conditions, changes in the retailing
environment and consumer preferences and spending habits; demographics and
other macroeconomic factors that may impact the level of spending for the types
of merchandise sold by the Company; unusual weather patterns; competition from
existing and potential competitors; competition from other channels of
distribution; pricing pressures; the ability to find suitable locations at
reasonable occupancy costs to support the Companys expansion program; and the
cost of labor, merchandise and other costs and expenses. The Company does not
undertake any obligation to update its forward looking statements.

The Company makes available as soon as reasonably practicable after
filing with the SEC, free of charge, through the Investor Relations section of
its website, www.bedbathandbeyond.com, the Companys annual report on Form
10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and
amendments to those reports, electronically filed or furnished pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934.

The Companys exposure to market risk for changes in interest rates
relates primarily to the Companys investment securities. The Companys market risks at November 27,
2004 are similar to those disclosed in Item 7a of the Companys Form 10-K for
the year ended February 28, 2004. The
Company continues to regularly evaluate these risks and continues to take
measures to mitigate these risks.

(a)Evaluation of disclosure controls and procedures. The Companys Principal Executive
Officer and Principal Financial Officer have reviewed and evaluated the
effectiveness of the Companys disclosure controls and procedures (as defined
in Exchange Act Rules 240.13a-15(e) and 15d-15(e)) as of November 27, 2004 (the
end of the period covered by this quarterly report on Form 10-Q). Based on that
evaluation, the Principal Executive Officer and the Principal Financial Officer
have concluded that the Companys current disclosure controls and procedures
are effective, providing them with material information relating to the Company
as required to be disclosed in the reports the Company files or submits under
the Exchange Act on a timely basis.

(b)Changes in internal controls. There were no changes in the Companys
internal controls over financial reporting that occurred during the Companys
most recent fiscal quarter that have materially affected, or are reasonably
likely to materially affect, the Companys internal controls over financial
reporting.

As required by Section
404 of the Sarbanes-Oxley Act, which is effective for the Company for its
fiscal year ending on February 26, 2005, the Company has been evaluating its
internal controls system in order to allow management to report on, and its
registered independent public accounting firm to attest to, its internal
controls. This is a new evaluation,
testing and report process for both the Company and its registered independent
public accounting firm as the requirements of Section 404 are effective for
companies with fiscal years ending on or after November 15, 2004. The Company is continuing to perform the
system and process evaluation and testing required in order to comply with the
management certification and auditor attestation requirements of Section 404.

(a) The
exhibits to this Report are listed in the Exhibit Index included elsewhere
herein.

(b)Report on
Form 8-K:

The Company furnished a report
dated December 15, 2004, in reference to a press release dated December 15,
2004, in which the Company announced financial results for its fiscal third quarter
ended November 27, 2004,
as well as its Board of Directors approval of a $350 million share repurchase
program.